A federal judge has ruled against the Internet Archive Hachette v. Internet Archive, a lawsuit filed by four book publishers, who decided that the website does not have the right to scan and lend books like a library.

Judge John G. Koeltl ruled that the Internet Archive had done nothing but create “derivative works” and thus needed permission from the books’ copyright holders—the publishers—before lending them through the National Emergency Library program.

The Internet Archive says it will appeal. “The ruling of the lower court today Hachette to Internet Archive is a blow to all libraries and the communities we serve,” said Chris Freeland, the Director of Open Libraries at the Internet Archive, writes in a blog post. “This decision affects libraries in the US that rely on controlled digital lending to connect their customers to books online. It hurts authors by saying that unfair licensing models are the only way their books can be read online. And it hinders access to information in the digital age and harms all readers everywhere.”

The two sides went to court on Monday, with HarperCollins, John Wiley & Sons and Penguin Random House joining Hachette as plaintiffs.

In his ruling, Judge Koetl considered whether the Internet Archive operated under the principle of fair use, which rather protected a digital book preservation project by, among others, Google Books and HathiTrust in 2014. Fair Use examines whether using a copyrighted work is good for the public, how much influence it has on the copyright holder, how much of the work has been copied and whether the use has “transformed” a copyrighted thing into something new, among other things.

But Koetl wrote that the “perceived benefits” of the Internet Archive’s library “could not outweigh the market damage to the publishers.” [Internet Archive’s] copying and unauthorized lending,” and that copying these books does not constitute “criticism, commentary, or information about them.” He notes that using Google Books was considered “transformative” because it created a searchable database rather than simply publishing copies of books on the Internet.

Koetl also dismissed arguments that the Internet Archive could, in theory, have helped publishers sell more copies of their books, saying there was no direct evidence, and that it was “irrelevant” that the Internet Archive had purchased its own copies of the books before making copies for its online audience. According to data obtained during the trial, the Internet Archive currently hosts about 70,000 e-book “loans” per day.

The lawsuit stemmed from the Internet Archive’s decision to close the “National Emergency Library” at the start of the covid pandemic, enabling people to read from 1.4 million digitized books without a waiting list. Typically, the Internet Archive’s Open Library program operates under a “controlled digital lending” (CDL) system, where it can lend digitized copies of a book one-to-one, but it has removed those waiting lists to provide easier access to those books when stay-at-home orders came in during the pandemic. (CDL systems work differently than services like OverDrive, which let you borrow publisher-licensed ebooks.) Some were not happy about the choice of the internet archive, and the group of publishers sued the organization June 2020. Later that month, the Archives shut down that program.

Despite the decision, the Internet Archive says it will continue to act as a library in other ways. “This case does not challenge many of the services we provide with digitized books, including interlibrary loan, citation linking, access for people with print disabilities, text and data mining, ebook purchases, and ongoing book donation and preservation. Freeland writes.